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See You In Court! Landlord tries to recover £150,000 from agent

A landlord is going to court to try to recover £150,000 allegedly owed by an agency in the form of guaranteed rent.

The legal action follows the reported refusal by the agency to pay the money owed, and then the same agency’s refusal to abide by a compensation award made to the landlord by the Property Redress Scheme.

The compensation was £25,000 - the largest amount the PRS can award. The agency has now been expelled from the scheme for failing to honour the payment to the landlord, who is now taking separate legal action against the agency. 


The case involved rent to rent arrangements for eight properties, which the agency allegedly struggled to fill due to the pandemic. 

The landlord agreed to reduced rent payments whilst the agent tried to find tenants, but the agency then apparently failed to comply with their contractual obligations to the landlord. 

The agency was also found to have used an unregistered handyman following a gas leak, resulting in the landlord reporting the incident to Gas Safe and the HSE. 

This all amounted to a significant financial loss for the landlord, says a statement from the PRS.

Following the decision Sean Hooker, head of redress at the Property Redress Scheme, states: “Guaranteed rent, or rent to rent, operators are becoming more and more common in the private rented sector, as it offers a lower barrier to entry into the property market. 

“Whilst there are reputable operators who have been providing the service for many years, there is a significant proportion of the market who are less experienced and need to make sure they fully understand their obligations and responsibilities.”


The Property Redress Scheme has also reported a 43 per cent increase in complaints relating to guaranteed rent since 2018. 

It says this data represents a warning to any landlord contemplating rent to rent; problems such as loss of rent, damage to property and sitting tenants do occur regularly, mainly because the parties have not fully understood the complexities or made proper legal provisions in the arrangement.

Paul Shamplina, founder of Landlord Action and also the chief commercial officer at Hamilton Fraser, says: “In my view, if the rent to rent arrangement is not carried out diligently the landlord loses control of what is happening at the property and this is where the problems begin. With many years’ experience of dealing with evictions I would advise any landlords entering into such an agreement to tread very carefully.”

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    Full support, and Best wishes to this Landlord.
    Based on the limited info in this article, It seems to be a combination of Wrongful, Fraudulent Trading, directors/partners of agency may also be involved in Misfeasance, and Undervalued transactions. Therefore clearly a judge should be able to order in the favour of LL for the Estate agency director/owners to pay the landlord from the business, with the proviso that if there are insufficient funds in the business then Directors/their family’s Personal Capital assets be seized and utilised to pay the creditor/LL.
    Good Luck.

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    Direct result of newbies being sold the dream by “gurus”

  • Matthew Payne

    There are loads of young "entrepeneurial" rent to rent wheeler dealers out there, who think "how hard can it be?" The vetting process for landlords of agents and tenants should never be compromised, however attractive some of these guaranteed HMO returns appear to be. If it looks to good to be true....

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    Just how many times have I been banging on about this ‘R2R’ for years but rarely or ever a comment coming back.
    It’s rampant under the cloak of Corporate Company let’s, its daft for LL if it goes well he gets paid and they make equally as much off his back, without owning anything and no Mortgage to pay no wonder it’s wide spread. I get letters all the time from them trying to rope me in. When it’s goes wrong this Article tells you what can happen. LL will always be fall the guy. I am not going to say I told you so for years.

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    Guaranteed rent, 6 / 12 months rent up front, all a scam, I delete the emails without opening them.

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    We need to have control of our own property but with the weight of regulations / legislation and compliance its getting near to impossible now.
    Control lost to Tenants, Councils, Shelter and to so many others as can be seen from this case.

  • PossessionFriendUK PossessionFriend

    The inability of ' EFFECTIVE' regulation of the lettings industry is causing harm to the many - majority of good Agents.


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